Expenses That Can Be Claimed From R&D Tax Relief

Date: 29th January 2014

Most of us may be aware of the fact that HMRA, Government of UK provides R&D tax relief. If you are preparing to claim the same, you need to basically know the expenses that account for claiming research and development tax credit. First and foremost your company and project must meet the definitions set out by the Department for Business, Innovation and Skill (formerly known as Department of Trade and Industry (DTI) to qualify for R&D tax relief.

A short summary of other factors that account for HMRA to obtain R&D benefits is given below.

Staff costs:

The staff working in the R&D sector should be under a contract directly with the company. If a staff is partly engaged in the R&D activity only the appropriate proportion of the cost can be claimed.

If an R&D staff is taken over by the company from Staff-providers, the staff providers need to be in contract with the individual whom they provide. Tax relief is not liable for consultants.

Capital Investment Costs:

R&D tax relief is provided only for daily expenses (running costs) towards research, however if you are involved in R&D and you invest on capital assets, you may be able to claim R&D capital investment allowances.


R&D tax relief can be claimed for materials used in carrying out research. The materials may be consumable or transformable. The tax relief is applicable only for physical materials and not for telephone, fax, internet or any other communication media.


In case if your company requires software for the research and development, R&D tax relief can be claimed for that but make sure that the software is predominantly used for research.

Other utilities:

It is quite obvious that lot of supporting materials is required for carrying out R&D for any project in a company. Costs for Electric Power, Water and Fuel can be claimed from the HMRC.

All the details mentioned above are given with reference to HMRC, Government of UK.

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